From Scrubbers to Scrap: What Happened to the Martin Drake Power Plant’s Valuable Assets?

The Martin Drake Coal Power plant demolition was completed at the end of August. We’ve been following the Colorado Springs Utilities (CSU) project closely. We have written about it and have attended numerous meetings about the plant’s decommissioning over the past several years. With the announcement this past August that the decommissioning was complete, we wondered…what happened to everything of value in the plant? What was sold off and did rate-payers benefit?

Coal power plants are being built in other countries like China, Japan, and India and there is likely a demand for parts from the numerous decommissioned plants in the United States. While we’re all being extorted into wind, solar, and other forms of energy, many foreign countries are unwilling to shake their coal dependency.  

We filed a Colorado Open Records Act (CORA) request to get information for you about what happened to the Martin Drake parts.

Decommissioning of a power plant refers to the comprehensive process of permanently shutting down and dismantling a plant, including removing radioactive or hazardous materials, disconnection from the grid, and securing the site. This highly regulated process prepares the plant for demolition, which is the physical tearing down and removal of the buildings, structures, and equipment.

CSU sent us an inventory of 6 groupings of parts auctioned off to bidders through the investment recovery department – a resource also used by the City of Colorado Springs and other public organizations. The funds from the sales were reinvested into CSU’s budget.

Documents obtained reveal that MRO Surplus Solutions, a company based in Knoxville, Tennessee, was the winning bidder of four of the six parts groupings. MRO spent $233,950 on thousands of parts from the Martin Drake Power Plant. The original value of the parts was well over $4.3 million.

For the remaining two groupings, various scrappers and private individuals purchased items like toolboxes, heaters, and conveyor belts. The total proceeds from these parts was $187,868.52 with no original prices provided or included.

The Demolition Contract

We reached out to CSU Strategic Communications Manager Steve Berry to clarify the final cost for the demolition.

According to the initial contract, Independent Demolition was paid $12,154,240 for “all demolition, environmental abatement activities, performance and payment bond costs, labor, materials, equipment, and administrative overhead and profit, costs associated with the Contract General Conditions, and any other costs associated with the performance of the work”. 

Independent Demolition provided a $5 million credit to CSU for scrap and other materials associated with the work. Without the credit, the initial contract price would have been $17,154,240. Berry shared that with change orders (mostly related to additional abatement work), the total project cost for decommissioning was about $20 million, with the $5 million credit. Without the credit, the cost would have been $25 million.

For the $5 million credit, Berry reported that, “contractually, the demolition contractor was not required to track the exact number of scrap materials they sold or what specifically was sold by the contractor. We took a lump sum model so that we did not have to monitor the process and weigh everything as it was going on. That would have been an inefficient use of ratepayer dollars and resources. So, we do not have that in a document, and the private contractor is not required to provide that to us”.

What happened to the Neuman Scrubbers?

Back in 2011, the Colorado Springs Utilities Board approved a no-bid contract of $73.5 million to purchase the Neumann Scrubbers. However, costs more than doubled to $165 million. It was a highly controversial decision to use the new technology and invest rate-payer dollars in the local company, Neumann Systems Group. Ratepayers essentially bankrolled Neumann, including the research and development of the scrubbers and related technologies that would cut down on the sulfur dioxide emissions from the plant.

The gamble with your rate-payer dollars didn’t pay off. Multiple lawsuits were filed over the Neumann contract. One lawsuit accused the city of awarding the contract without a competitive bid process and of using untested technology.  Another lawsuit accused the city of violating clean air standards and a document was accidentally emailed to the plaintiff. It allegedly indicated that the Martin Drake Power Plant had surpassed the maximum sulfur dioxide level allowed as a part of the plant’s emissions. Clean-air advocates continued their pressure on the CSU board of directors. The argument over the scrubbers working or not working ended with the decision to decommission the plant by 2023.

We asked Berry about the parts from the Neumann Scrubbers. He said, “The scrubbers are made up of thousands of pieces of parts. Anything that was metal would have been included in the $5 million credit and anything else would have been sold separately through investment recovery”.

Our Take

Rate-payers are the big losers in the decommissioning. It’s no wonder that people have little faith in government institutions. The demolition was a huge expense with very little money recouped. Rate-payers took a beating- especially when it came to the Neumann Scrubbers.

Next up, we expect the city and CSU to pursue a taxpayer-funded federal grant to rehabilitate the Martin Drake land, further adding costs to the decommissioning of the Martin Drake Power Plant. They aren’t finished reaching into your wallet yet.  We’ll keep an eye out for what happens next with the Martin Drake land.